Extracted from the PDF above. The PDF is authoritative.
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HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF APRIL, 2026 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 6769 OF 2026 (GM-RES) BETWEEN:
1.
MISBAH ASHRAH DIRECTOR, JAR GOLD RETAIL PRIVATE LIMITED, AGED ABOUT 32 YEARS, RESIDING AT NO.252, SHOBHA MARZARIA GRANDEUR, NO. 4/1, 4/1, BANNERGHATTA RD, BHAVANI NAGAR, BENGALURU 3 560 029.
2.
SANDESH NAHAR DIRECTOR, JAR GOLD RETAIL PRIVATE LIMITED, AGED ABOUT 31 YEARS, RESIDING AT FLAT NO.203, 2ND FLOOR, ORLANDO LAKEVIEW, JAYANAGARA EAST, BENGALURU 3 560 011. &PETITIONERS (BY SRI P.CHINNAPPA, ADVOCATE) AND:
1.
STATE OF KARNATAKA BY STATION HOUSE OFFICER
Digitally signed by SANJEEVINI J KARISHETTY Location: High Court of Karnataka
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HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
KORAMANGALA POLICE STATION, BENGALURU 3 560 095.
2.
MR.SRIKANTEGOWDA B. (PSI) AGED ABOUT 32 YEARS, WORKING AT, KORAMANGALA POLICE STATION, BENGALURU CITY 3 560 095. &RESPONDENTS
(BY SRI B.N.JAGADEESHA, ADDL. SPP FOR R-1)
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA READ WITH SECTION 528 OF BNSS, 2023 PRAYING TO (A) ISSUE A WRIT OF CERTIORARI,
ORDER OR DIRECTION OF APPROPRIATE NATURE QUASHING THE COMPLAINT AND F.I.R. BOTH DATED 16.01.2026 REGISTERED AS CRIME NO. 25 OF 2026 BY KORAMANGALA POLICE STATION, BENGALURU, PENDING ON THE FILE OF PRINCIPAL CITY CIVIL AND SESSIONS JUDGE (CCH-1), BENGALURU, IN SOFAR AS THE PETITIONER IS CONCERNED FOR THE ALLEGED OFFENCES UNDER SECTIONS 21(1) AND 21(2) OF THE BANNING OF UNREGULATED DEPOSIT SCHEMES ACT, 2019 (ANNEXURE A AND B); (B) CONSEQUENTLY, DECLARE THAT ALL ACTIONS TAKEN PURSUANT TO COMPLAINT AND F.I.R. BOTH DATED 16.01.2026 REGISTERED AS CRIME NO. 25 OF 2026 BY KORAMANGALA POLICE STATION, BENGALURU, ARE ILLEGAL, ARBITRARY AND VOID AB INITIO (ANNEXURE A AND B)
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HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
THIS PETITION, COMING ON FOR ORDERS, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA
ORAL ORDER
The petitioners are before this Court calling in question registration of a crime in Crime No.25 of 2026 registered for offences punishable under Section 21(1)(2) of the Banning of Unregulated Deposit Schemes Act, 2019.
2. Heard Sri P Chinnappa, learned counsel appearing for petitioners and Sri B.N.Jagadeesha, learned Additional State Public Prosecutor appearing for respondent No.1.
3. The petitioners are accused Nos. 1 and 2. This Court, qua accused Nos. 3 and 4 in the same crime, has rejected the petition in terms of its order dated 04-03-2026 in Writ Petition No.5968 of 2026. The reasons rendered to reject the crime qua accused Nos. 3 and 4 would become applicable to accused Nos. 1 and 2, the present petitioners. This Court has held as follows:
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HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
<&. &. &.
CONSIDERATION:
7. The afore-narrated facts are a matter of record. Digital gold or business of sale of gold online is a concept that emerged in the year 2013 when Metals and Minerals Trading Corporation of India, a Government of India Company launched a business for sale of gold/digital gold to customers online. On 17-10-2013 the Securities and Exchange Board of India (8SEBI9) clarified that the proposed business appears to be only transaction of sale and purchase of gold and does not qualify as a collective investment scheme. Long thereafter, genesis of the Company happens. In 2021 the Company launches a mobile application and a website in the name and style of 8JAR9 which enables customers to purchase, seek delivery and sell back gold at their discretion. The purchase of gold happens to an amount beginning from ¹10/- and goes on unlimited. The business of these petitioners which began in 2021 has now flourished into a dramatical figure of ¹4,000/- crores. When the business was flourishing for 5 years, an electronic mail is communicated by the Reserve Bank of India. The mail dated 13-10-2025 reads as follows: <Madam/Dear Sir, Please refer to the trailing mail and attachments on the captioned subject. 2. In this connection, complainant has raised a number of issues against the Jar app mentioning that it is structurally opaque, legally unguaranteed, behaviorally manipulative and built on a culturally sensitive commodity (Gold). 3. In connection to the above, MI, DoS, Bengaluru has carried an MI visit at Jar Digital Gold at the available address (as enclosed) and was observed that investments (Rs. 10 to 1 lakh) are accepted for digital gold at the day's rate. However, Instead of physical gold, the gold is said to be kept in an account maintained with Jar, digital form in an account maintained by Jar, which does not comes under RBIs regulation. - 5 -
HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
4. In addition to that, Investors also get 30-40% referral bonuses, can stop investing anytime and withdraw funds at the prevailing gold rate. It was also noted that Jar Gold Retail Private Limited and Jarfin Retail Private Limited are also functioning at the same building. 6. Since these companies are not regulated by RBI but are registered under RoC Bengaluru, the same was forwarded to RoC, Bengaluru for necessary action. 7.
However, during the meeting with Chief Secretary, it was advised that this Information to be sent to Police Department CID. Therefore, the MI visit inputs are forwarded to CID and AIGP, Crime for information and necessary action, if any, as these companies are located in Bengaluru as advised by Chief Secretary as the same would be taken up during the upcoming SLCC meeting. 9?-?9 Regards, -??9 9)? K / ) K / Market Intelligence Unit +/=O+ =-? / Department of Supervision -?.9.=I., -;K / Reserve Bank of India, Bengaluru +K) / Ph: 080-22180364/383/379=
The electronic mail to all the accused clearly indicated that a complaint is received, it has several issues against JAR app mentioning that it is structurally opaque, legally unguaranteed and behaviorally manipulative and built on a culturally sensitive commodity (gold). The investors get 30 to 40% referral bonuses and can stop investing anytime. Such companies are not regulated by the RBI, but are registered under the Registration of Companies. It is advised that information be sent to CID of the States and all the investigating officers. This mail communication is particularly to the State of Karnataka. The SEBI issues a public notice on 08-11-2025. The public notice reads as follows:
“Caution to public regarding dealing in 'Digital Gold'
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HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
SEBI has enabled investments in gold and gold related instruments through various SEBI regulated gold products. These are exchange traded commodity derivative contracts, Gold Exchange Traded Funds (ETFs) offered by Mutual Funds and Electronic Gold Receipts (EGRs) tradeable on stock exchanges. Investments in these SEBI regulated gold products can be made through SEBI registered intermediaries and are governed by the regulatory framework prescribed by SEBI. It has come to the notice of SEBI that some digital/online platforms are offering investors to invest in ‘Digital Gold/E-Gold Products'. Digital Gold is being marketed as an alternative for investment in physical gold.
In this context, it is informed that such digital gold products are different from SEBI regulated gold products as they are neither notified as securities nor regulated as commodity derivatives. They operate entirely outside the purview of SEBI. Such digital gold products may entail significant risks for investors and may expose investors to counterparty and operational risks. Investors/participants are made aware that none of the investor protection mechanisms under securities market purview shall be available for investments in such Digital Gold/ E-Gold products. Mumbai November 08, 2025”
The SEBI warns citizens to be careful in investing in digital gold of any Company. After these communications, a memorandum is issued by the Joint Commissioner of Police (Crime), Bangalore City. It reads as follows: <¾ ¼ ¾¼ Ý ¾Î ¼Î: 54/®¾¯-4/ /2025 Ý ¯Í ¼ ÎÝ!,
"Î#¿%¼Í ¬#¼
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HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
': 10-11-2025 (¾®¬ (¾®¬ (¾®¬ (¾®¬ )¿¯:- JAR Gold Retail Private Limited & Jarfin Retail Private Limited ®+#¿ )¼Í®- .® ÎÞ1Îο34½ Í!¬Í. 7Î8Ý9:-®.:¾¬ ÎÝ! ®¬. ¼: ®¾¯-12/45/2025. ': 21.10.2025. *** *** *** ;ݾ= )¿¯ Î= ¼¬@®AÎ, 7Î8ÝB¬ ®.:¾¬ ÎÝ!¯ ®¬.® 8 MI Unit ¼½¼ -;ÝC ¬ 8 "Jar digital Gold" ¼DÎE¯Í ¬¬F GÎÝ' ί ®Î¾ HIC 1ÎÎÝCJ ½ÎH Î#¿¬ÍF LÝ!¼ÍM ®ÍN, ½ÎH Î#¿¬ÍF ÎݼG¾O P¬F® ¼Î®® 8 +ÝQÎ HIC ¾Aί 8 7R ÎÎH¼Í½S®Í #®¬ Î= ¬'QÎ, QÎÝ !ÝMT¾O ½ÎH ÎQ¾¼!1Î 30% !® 40 % ½Î1Πί¼C VÎÎݬ +ݾ#ÍM QÎ W®Í ½¼'T¾OQÎ. X Jar Gold Retail Private Limited Y¾#Î Jarfin Retail Private Limited ®+#¿3 Z [ \ +¯¬.¯ Î= ^¿®Í½S'¾8QÎ ®+#¿ ÎÎÝ®_ +¯¬. (RoC), "Î#¿%!¬ 8 ÎÎÝQ¾`¬G¾OGÎ W®Í ½¼'T¾OQÎ, X )¿¯® 8 D¾½a+ bA¾¼c Y¾#Î ½¯ ¾¼Í +¯® 7¾8dÎ#¿ D¾¯AÎ ¼Í½S®!® #¬ .® ÎÞ1Îο34½AÎ ¼ÎP¼ÍA¾ Î. ®N!®, ®.:¾¬ ÎÝ!¯ ®¬.® 8 ®.D¾ ¼Í½ W¾8 ¾#¿¬ÍF +¯f¾¬ÍD¾¼ ®!gÝ , #¬ ÎÞ1Îο34½AÎ ¼ÎP, ®Í'¬ .® ¾=O ¿3b ÎξOQÎ. Digitally signed by AJAY HILORI Date: 10-11-2025 11:10:11 ah Ý ¯Í ¼Í, (®¾¯#¿3), "Î#¿%¼Í ¬#¼=
This is replied to by the petitioners.
The reply is not necessary to be extracted, as the memorandum of writ petition is verbatim similar to what is replied to. 8. There are several complaints against this app by the customers or several citizens. I deem it appropriate to notice one such observation. It reads as follows:
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HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
“This app has absolutely no credibility, you keep getting prompts that you've saved enough money to buy a gold coin, but every time just before placing order for gold coin, you get a message that gold coin is not deliverable. Also you can't withdraw the amount you've saved, it only allows to withdrawal almost half of the amount. I mean, what even is the point of this application, why wouldn't anyone just use a savings account? Lost case. 10,968 people found this review helpful
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No Jar App - Savings & Investments 6 November 2023 Hi Kanishka, We are sorry for the inconvenience. Kindly share your registered mobile number and issue details at voc@changejar.in or WhatsApp us: wa.me/916366693874, You can also reach us at our customer care number 888-439- 0000(Mon to Friday 10 AM-6 PM), We will be happy to assist you. Thank you” (Emphasis added at each instance) There are several other observations by several customers about purported fraud in the app. With all the communications, the Police ostensibly cannot keep quiet, as every citizen is involved in this and it has a potential of growing up into a huge problem. Therefore, suo motu complaint is registered by the Koramangala Police station. Since the entire issue trigged from the complaint, it is necessary to notice the entire complaint in its entirety. It reads as follows:
THE COMPLAINT: <¼½!1Î, j¾k¾@ ¾!#¿3, ÎÎݼ®#¾ Ý j¾kÎ,
"Î#¿%¼Í ¬#¼. - 9 -
HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
®, g.ÝjÎÝ1Ì.[. .W.\, ÎÎݼ®#¾ Ý j¾kÎ,
"Î#¿%¼Í ¬#¼.
f¾¬ÎÝ, )¿¯:- JAR GOLD RETAIL PRIVATE LIMITED ®+ Y¾#Î ¼½ ®+#¿3 ®¬Í ®¼ +QÎݾ¼Í#¿3 THE BANNING OF UNREGULATED DEPOSIT SCHEMES ACT, 2019 H ¼¬@® Î#ÍÎÝZ H ÎÎQ¾` Îο4QÎ +¯M.¬ mÝaÎ !ÝM¯ 8 n"ÎÞC 8 ÎÝ¿o ®Î¾ P¬F® 9!Ý' ®¬Í ½ÎH Î f¾H D¾½a+!® jÎݽ_¯¬ÍF .®G¾O LÝ!® Í!¬AÎ .® ÎÞ1Îο4¾Í ¼ ¾¼® ®¼G¾O ®Î¼Í. ** *** ** ¾¬Í g.ÝjÎÝ1Ì, W\, 2023 !® ÎÎݼ®#¾ Ý j¾kί 8 ¬½ +½b¼ÍM ¼ÍAÎ ÝÎ. ¬¬F Ý j¾kί j¾k¾@ ¾!#R1Î f¾¬ Ý ¯Í ¼ ÎÝ! (¾®¬ ¼.54/®¾¯-4//2025, '¾: 10.11.2025, f¾¬ 7® Ý ¯Í ¼Í, 1ÎF¯ )V¾#,
"Î#¿%¼Í ¼½¼ (¾®¬ ¼. ZW/591/H( ))/2025, '¾ 20.11.2025, ®.:¾¬ pÎÝ! ®¬. ¼. ®¾¯-12/45/2025, '¾ 21.10.2025 eÉÆvÉUÉ !¼q "¾r s HT¾ ¼½¼ f¾¼ÍtÎu )vwk¾ ®¿ -;ÝC ½¼' '¾ 20.07.2025 LÝ! ¬¬1Î ¬¬F ;ݾ@ ¾!¯Í ¼®! JAR GOLD RETAIL PRIVATE LIMITED ®+ ¬xμÍM ¼Í½ ¬1¾¼® 9!Ý' ®¬Í ½ÎH Î#¿ ¬1Îy z¾.| )p¾¼kÎ f¾H ½¼' ¼ 8¼Í½AÎ +ÝH® ¼Îvί ;ÝÎ1Î, ¾¬Í z¾.| )p¾¼kί¬ÍF ÎÞ1ÎÎH¼ÍAÎ ÝÎ. - 10 -
HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
¼®! !¼q "¾r s HT¾ ¼½¼ f¾¼ÍtÎu )vwk¾ ®¿®½¼Í ¼®! ®+¯Í ¬xμÍM ¼Í½ ½½Y¾¼® ¾¬Î+¬ f¾¬AÎ ¬1Îy ¼¾¯ ½ ®H ¼®! ¼DÎE¯½¼Í ¬®} GÎÝ' ί ªÀÄÆ®PÀ D¾½a+!® HIC 1ÎÎÝCJ ½ÎH Î#¿¬ÍF LÝ!¼ÍM ®ÍN, ¼®! ½½Y¾¼½S +¯M.¬G¾O®ÍN .® ÎÞ1Îο34½AÎ ¬®} -;ÝC ½¼' '¾ 20.07.2025 ¬ÍF ¯! ÎÞ1ÎÎ z¾.| )p¾¼kί 8 X ο ¼#M#¿3 ͬ'¼Í¬ GÎ. 1. JAR GOLD RETAIL PRIVATE LIMITED ®+ ®Í ®+ ¾¬Î+¬ 8 ^®Í ÎÎQ¾`¬ ®+T¾O®ÍN, ¼®! ÎÝ!¯ ÎÎQ¾`¬ )~¾¼½S ¬. 752, 18ÎÝ ;Þo, 5ÎÝ ¾., ÎÎݼ®#¾ 6ÎÝ "¾8r,
"Î#¿%!¬ 8 ¼Í¬ QÎ. ¼®! ®+1Î 1) Misbah Ashraf, 2) Sandesh Nahar, 3) Nishchay Babu Arkalgud ¼½¼Í#¿3 +QÎݾ¼Í#~¾O¼ÍA¾ Î. 2. ¼®! ®+¯Í ®¬Í ®¼ +QÎݾ¼Í#¿3 HIC 8 ÎÝ¿o ®Î¾ D¾½a+!1Î P¬F® 8 ½ÎH Î f¾Í½ Í!¬AÎ ½ ¾¾ f¾H ÎÎÍM ®ÍN, ®Î X ½½Y¾¼#¿ Í!¬AÎ Securities and Exchange Board of India (SEBI) '® G¾ ¼¬@® +¯¬.¯ z¾.@ ¾¼'® C£ÀĪÀÄw ¥ÀqÉAiÀÄzÉà G¾ ÎÎQ¾` Îο4QÎÝ +¯M.¬ !ÝM¯ 8 ¬¬F ½½Y¾¼#¿¬ÍF f¾ÍM ¼Í½S®Í ;ÝÎÎFÝ Î= ͬ¼Í¬ QÎ. 3. ¼®!
¼DÎE¯Í ®¬Í ®¼ +QÎݾ¼Í#¿3 D¾½a+¼Í#R® ½¬Í ¼Îz¾`#R® ^®Í ¾w ¼Îz¾`#¿½Î1Î ½ÎH Î#¿¬ÍF HIC 1ÎÎÝCJ Yμ!¬ 8 LÝ!¼ÍM ®ÍN, ¼ P¬F® ¬® 1Î HIC ¼Î®® 8 P¬F½S ¼¬@® 1¾.½¼ -¾AÎ#¿ 8 QÎ W®Í AÎÎÝ! ½!1Î "ÎÝ ¾Q¾# ®¬ÍF b®xί¾Í ½ ¾¾ f¾H ÎÎÍAÎ ÝGÎ W®Í YÎÝ¿3½ +¯M.¬ mÝaί¬ÍF YÎμH D¾½a+1ÎÎR¼Í¬ QÎ. - 11 -
HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
4. ¼®! +¯M.¬ mÝaÎ1Î ¿kÎ1ÎÎ D¾½a+¼Í ¬®} - ¾AÎ#¿¬ÍF ¼®! ¼DÎE¯ 8 AÎÎ®Í ®Î¾ ½¯½¬ÍF ½ÎH Î f¾H HIC ¼Î®® 8 P¬F® jÎݽ_#¿¬ÍF YÎÎ'¼ÍA¾ Î. ®¼ •ÎÎAÎ ¼®! ®+¯Í ¬¬F ½ÎH ÎQ¾¼!1Î ¬®} •ÎÎAÎ 7R® D¾½a+¼¬ÍF DÎ~ή 8 ¬½ ½ÎH ÎQ¾¼!1Î €ÎÝ. 30 !® 40 Referral Bonus ÎÎͽSQ¾O YÎÝR ¬[ ½ÎH Î#¿¬ÍF ®¬Í jÎݽ_#¿¬ÍF LÝ!¼ÍM ¼Í¬ QÎ
5. z¾.| )p¾¼kί 8 ¼®! ¼DÎE1Î ¼¬@® z¾.@ ¾¼® ¬Í®M#¿¬ÍF ®¬Í ½½Y¾¼® ¼L¼Î®#¿¬ÍF ¼ 8¼Í½AÎ '¾ 26.11.2025 Y¾#Î 04.12.2025 ¼®Í ÎÎÝhÝ +ݾO¬Í . ® Î= ®.MT¾O ¼®! ¼DÎE¯Í '¾ 02.12.2025 Y¾#Î 18.12.2025¼®Í 7¬ ¼½¬ÍF +ÝH®ÍN, ®¼ 8 ¼®!¯½¼Í ¼®! ®+¯½¼Í D¾½a+¼Í#¿3/ 1¾.½¼Í#R1Î n"ÎÞC 8 ÎÝ¿o ®¬Í G΃ DÎÞ„ ¬ 8 P¬F½¬ÍF ÎÞ1ÎÍͽ, ¼Í¾G¾O 9!Ý'¼¾Í, f¾¾ f¾¾Í 1¾.½ÎÎ'1Î ^®†® f¾H ÎÎÍ ®+¯ +¯® ®¬Í ¿¼¬Í #¿ ¬L¯ 1¾.½¼Í#R® P¬F® ;ÝÎ ¯Í..\ ®Í¾¬¼ ½¯½¬ÍF ½ÎH Î f¾H Îο34M ¼Í½SQ¾O, 1¾.½¼Í 9!Ý' f¾Í½ VÌM P¬F® ¬Í#ͯG¾O ¼f¾¬ n¬ ® P¬F½¬ÍF ); f¾¾® ¼L¬¬. G¾¯ïÖ #¿ 8 ¼#.b¼¾#ÍM ¼Í½SQ¾O, 1¾.½¼Í VÌM P¬F® f¾ ݬL® HIC Q¾9Î YÎÎ'¼ÍA¾ Î. 1¾.½¼Í ¬®} ^xά¬® P¬F½¬ÍF )®Í¾}¬G¾O ¬#®Í ¼Î®® 8 f¾¾ f¾Í½/ VÌM P¬F® ¾¯#~¾O/ P¬F® ¼¯#¿¾FO ®!½M¼Í½ ‡= YÎÎ'¼Í½SQ¾O MR¼ÍA¾ Î. ®Î ¼®! ½½Y¾¼½S ¼¬@® +¯M. z¾.@Ý ¾¼G¾® SEBI G¾ ¬Î z¾.@ ¾¼®H Îή_ f¾H ÎÎH®N¼ ¬1Îy T¾½SQÎÝ )¿¯½¬ÍF G¾ Q¾9¾M#¿¬ÍF Y¾a¼Í®H¼Í½S'¾8 ®¬Í ¬½ Îή_ ®¬Í ¬Í®M #¬)¾8GÎ®Í 7Î8ÝB®N!® ¼®! ¼DÎE ®¬Í +QÎݾ¼Í#¿3 ¬®} ;ݾ=_® ½½Y¾¼½¬ÍF +¯¬. z¾.@ ¾¼'® ¬Í®M¯¬ÍF ®xί¾¼QÎÝ ®¬Í ÎÎQ¾` Îο4¾¼QÎÝ +¯M.¬G¾O ¼®!
mÝaί¬ÍF ¼Î D¾½a+!® ½¯½¬ÍF ½ÎH Î f¾Í½S®¼ ®Î¾ jÎݽ_ f¾H Îο34M ¼Í½S®Í ¬ˆ‰ @+¯®® ¾ 3 ¬ÍF 7¾8Š ¾
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HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
21(1) ®¬Í (2) ¼H¯ 8 g‹¾½ ®¾¯ W¼O®ÍN ;ÝÎÎFÝ Î= ͬ¼Í¬ QÎ. 6. ¼®! ¼DÎE ®¬Í +QÎݾ¼Í#¿3 +ÝH® f¾bM¯AÎ ¼Íf¾¼Í 3.3 ÎÎÝh a¬¼¿Íu ¬®} n"ÎÞC 8 ÎÝ¿o ®Î¾ -¾AÎ#¿¬ÍF AÎÎ®Í ½½Y¾¼ f¾ÍM ®ÍN, X bÎFί 8 ¼®! ¼DÎE ®¬Í +QÎݾ¼Í#¿3 ¼Íf¾¼Í 100 ÎÎÝhO¬ |O¾Í ½¯½¬ÍF D¾½a+!® LÝ!¼Í½ ¬1Îy f¾bM ®ÍN, X Í!¬AÎ ¬®} Î= ®¬.#¿¬ÍF ®¬Í f¾bM#¿¬ÍF +ÝQÎÝ bQÎÝÍ Y¾c¼ÍA¾ Î. ÎÝ "¾! ¾¬Í D¾½a+!® LÝ!® ½¯® ^Íu n¬¾#Í f¾bM +ÝH W®Í ÎÝRQ¾NO¯Î Î Y¾a¼Í®H¼Í½S'¾8. X bÎFί 8 ¼®! ¼DÎE¯Í +ÝH® f¾bM ;ÝÎ ¼Íf¾¼Í 100 ÎÎÝh «ÄO¾Í ½¯½¬ÍF D¾½a+!® X +¯M.¬ mÝaÎ H¯ 8 ÎÎݬ¼Í LÝ! ®¾¯ W¼O¼ÍA¾ Î. 7. SEBI ¼DÎE¯½¼Í ¬®} ®¬. PR No. 70/2025, dated 08.11.2025 ¼ ®Î¾ D¾½a+!1Î X !ÝM¯ HIC 1ÎÎÝCJ/-1ÎÎÝCJ z¾.PïÖ÷ì ½½Y¾¼½S +¯M.¬G¾OQÎ W®Í ¼†¿u®H¼Í¬ QÎ ®¬Í X Í!¬AÎ ¬ˆ‰ @+¯®®H, .® ÎÞ1Îο34½AÎ ¼ÎP¼Í¬ QÎ. 8. ¼®! ¼DÎE ®¬Í +QÎݾ¼Í#¿3 A¾½S f¾ÍM ¼Í½ ½½Y¾¼½S +¯M.¬G¾OGÎ W®Í MR®Î ¼½ D¾½a+!1Î +a ¼#M¯¬ÍF MR¼QÎÝ ¬®} HIC z¾8„•¾Ž ®Î¾ E-SÁvɯ¬ÍF AÎÎ®Í ½¯ ½ÎH Î f¾Í½S®¼ ®Î¾ P¬F 9!Ý' jÎݽ_ Íu ÎÎÍ ¬®1Î
"ÎÝ ¾Q¾# f¾!® ½¯½¬ÍF ½¼ ¾AÎ`® ¼DÎE ®Î¾ DÎ~Î®Í Îο4¬½Í®Í W®Í ¬[ ¼Íf¾¼Í 3.3 ÎÎÝh a¬jA® ¼Íf¾¼Í 100 ÎÎÝhO¬ YÎvÍ• ½¯½¬ÍF LÝ! ½ÎH Î f¾H ÎÎÍ ¬¬¼ ®¼R¼QÎÝ nݼ f¾Í½ ®.¯¬F® 8¼Í½S®Í ͬ¼ÍM QÎ. 9. ¼®! ¬ˆ‰ @+¯®® ¾ 21(1) ®¬Í (2) ®¾¯½S ¼®! @+¯®® ¾ 28 ¼H ¼(Î ®¬Í •¾|Ý¬Í ¼b¬ ®¾¯G¾O®ÍN, ݼ!1Î ®.¼¯ Q¾9 ÎÎÍ ¬+Î f¾¾Í @ ¾¼)QÎ, •ÎÎAÎ1Î f¾¬ ¾ 7v• ¾T¾¾¯½S c.|¬C h¿o ¼. 100048/2024 •ÎÎAÎ1Î c.|¬C
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HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
h¿o ¼.
102510/2023 ¼ 8 '¾ 17.01.2025¼®Í +ÝH® Mݬ¬ÍD¾¼ ¬½ ®.¼¯#¿¬ÍF Ý j¾k¾@ ¾!¯Í Q¾9 ÎÎÍ ¬+Î f¾¾Í @ ¾¼)QÎ W®Í MÝ®S +ÝH®N¼ bÎFί 8 ¼ ¾¼® ®¼G¾O ¾¬Í X '¬ JAR GOLD RETAIL PRIVATE LIMITED ®+ Y¾#Î ¼½ ®+#¿3 ®¬Í ®¼ +QÎݾ¼Í#~¾®1) Misbah Ashraf, 2) Sandesh Nahar, 3) Nishchay Babu Arkalgud ¼½¼Í#¿ )¼Í®- ¼Î ¾¬Î¬Í .® ÎÞ1Îο4"ÎÝ Î®Í ÎÎÝ! ®Î¼Í ¼ 8¼ÍM ¼ÍAÎ ÝÎ. ½®Î#~Î%'1Î, ¬®} )€¾L ¼b/- (g.ÝjÎÝ1Ì.[.) .W.\, ÎÎݼ®#¾ Ý j¾kÎ,
"Î#¿%¼Í ¬#¼.” ¾#¬Í #¿3: 1) ÎÎݼ®#¾ Ý j¾kÎ H.. Z ¬. 633/2025. 2) Jar Gold Retail Private Limited & Jarfin Retail Private Limited : ®+#¿ )¼Í®- .® ÎÞ1Îο34½ ¼¬¯ f¾¬ 7® Ý ¯Í ¼Í, 1ÎF¯ )V¾#,
"Î#¿%¼Í ¼½¼ (¾®¾ ¬. Z.W/591/H( ))/2025, ':20/11/2025. 3) Jar Gold Retail Private Limited & Jarfin Retail Private Limited ®+#¿ )¼Í®- .® ÎÞ1Îο34½ ¼¬¯ f¾¬ Ý ¯Í ¼½¼ ÎÝ! (¾®¬ ¬.54/®¾¯-4/ /2025, ':10/11/2025. 4) Jar Gold Retail Private Limited & Jarfin Retail Private Limited ®+#¿ )¼Í®- .® ÎÞ1Îο34½ ¼¬¯ f¾¬ ®Y¾ +QÎݾ¼Í & ¼w ®Y¾ +!Ýw¼Í, PÀ£ÁðlPÀ gÁdå gÀªÀgÀ PÀbÉÃj ¥ÀvÀæ £ÀA.C¥ÀgÁzsÀ-12/45/2025, ':21/10/2025. - 14 -
HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
5) RBI MI Unit ¼½¼ X;ÝC '¾:13/10/2025¼ ®.M & ®ÎÎ'1Î ¼Í½ Q¾9¾M#¿ ®.M#¿3. 6) Z.[.\ W.\ ¯Î+„ ¼½¼ X;ÝC ®Î!¬ ;ÝÎ ¾ 173(3)(1) [.Wo.W.W H z¾.| )p¾¼kÎ ÎÞ1Îο4¾Í f¾¬ ¼Y¾¯ Ý ¯Í ¼Í, ®HG¾¿ 7® )V¾# ¼½!® ®xÎ'¼Í½ ®xÎ'¼Í½ ¬Í®M ®¬. ':25/11/2025. 7) Jar Gold Retail Private Limited PÀA¥À¤ ¤zÉÃð±ÀPÀgÀÄUÀ½UÉ zÁR¯ÁwUÀ¼À£ÀÄß Y¾a¼Í®H¼Í½AÎ ÎÎhu¼Í½ ÎÎÝh ':26/11/2025. 8) Jar Gold Retail Private Limited ®+ ¼½¼ !¥ÉèöÊ ®¬. ':01/12/2025. 9) Jar Gold Retail Private Limited PÀA¥À¤ ¤zÉÃð±ÀPÀgÀÄUÀ½UÉ zÁR¯ÁwUÀ¼À£ÀÄß Y¾a¼Í®H¼Í½AÎ ÎÎhu¼Í½ ÎÎÝh ':04/12/2025. 10) Jar Gold Retail Private Limited ®+ ¼½¼ !¥ÉèöÊ ®¬. ':12/12/2025 & ¼®!¯½¼Í Y¾a¼Í®H¼Í½ Q¾9¾M#¿3. 11) SEBI, Southeren Regional Office, Chennai gÀªÀjUÉ Jar Gold Retail Private & Jarfin Retail Private Limited PÀA¥À¤UÀ¼À ¸ÀA§AzsÀ ªÀiÁ»w ¤ÃqÀĪÀAvÉ X;ÝC ®Í¾¬¼ ÎÎhu¼Í½ ÎÎÝh ':05/12/2025. 12) Z.[.\ h¿o ¼¬¯ z¾'¬ ®+#¿ )¼Í®N ÎÞ1Îο4¬½ÍQ¾® .®® ¬1Îy ¾¬Î¬Í ¼¾YÎ1¾¼!® ˜z¾.¯ ½¼' ÎÎH ÎÎͽAÎ f¾¬ 7® Ý ¯Í ¼Í, 1ÎF¯ )V¾#, "Î#¿%¼Í ¼½!1Î ÎÎÝ!¼Í½ ®¬) ':05/12/2025.
13) Chief Manager, Investment Management department, SEBI, Mumbai gÀªÀjUÉ Jar Gold Retail Private Limited & Jarfin Retail Private Limited PÀA¥À¤UÀ¼À ¼¬¯ f¾bM +ÝͽAÎ ÎÎhu¼Í½ ÎÎÝh ':08/12/2025. - 15 -
HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
14) Z.[.\, W.\ ¯Î+„ ¼½¼ ;ÝC ®Î!¬ ;ÝÎ ÎÞ1ÎÎH¼Í½ z¾.| )p¾¼kÎ ¼¬¯ ½¼'¯¬ÍF f¾¬ ¼Y¾¯ Ý ¯Í ¼Í, ®HG¾¿ 7® )V¾# ¼½!1Î +GÎÝ' ÎÎH¼Í½ ®¬. ':05/12/2025. 15) Z[\ ¼½!1Î X;ÝC ®Í¾¬¼ ®Î¼Í +ÝH®N Lakshminarasimhan Santhanam ¼½!1Î ®.¼¯ Q¾9¾Í f¾Í½ ¼¬¯ j¾kÎ1Î Y¾a¾O B¬ ®Î¼¬ÍF +ÝͽAÎ ÎÎhu¼Í½ ÎÎÝh ':19/12/2025. 16) SEBI gÀªÀgÀ ¥ÀwæPÁ ¥ÀæPÀluÉ PR No.70/2025, ':08/11/2025. 17) f¾¬ 7® Ý ¯Í ¼Í, 1ÎF¯ )V¾#, "Î#¿%¼Í ¼½¼Í f¾¬ ¾¬Î¬Í ¼¾YÎ1¾¼¼Í, Ý ¯Í ¼½¼ ÎÝ!, "Î#¿%¼Í ¬#¼ ¼½!1Î Jar Gold Retail Private Limited & Jarfin Retail Private Limited PÀA¥À¤UÀ¼À «gÀÄzÀÞ PÁ£ÀÆ£ÀÄ .® a¼ÍO¼¾Í ˜z¾.¯ ½¼' +ÝͽAÎ ÎÎÝ!¼Í½ ®¬) ':08/12/2025. 18) f¾¬ 7® Ý ¯Í ¼Í, 1ÎF¯ )V¾#, "Î#¿%¼Í ¼½¼Í ¾¬Î¬Í ¼¾YÎ1¾¼¼Í, Ý ¯Í ¼½¼ ÎÝ!, "Î#¿%¼Í ¬#¼ ¼½¼ ˜z¾.¯ ½¼'¯¬ÍF ®Í'¬ .®® ¼¬¯ ÎÎݼ®#¾ Ý j¾kÎ1Î ¿3b PÉÆnÖgÀĪÀ (¾®¬ ¬.¹.Dgï.JA./664/r¹¦(D«)/2025, ':20/12/2025. 19) ¾¬Î¬Í ¼¾YÎ1¾¼¼Í, Ý ¯Í ¼½¼ ÎÝ!, "Î#¿%¼Í ¬#¼ ¼½¼Í f¾£Àå 7® Ý ¯Í ¼Í, UÉßï )V¾#, "Î#¿%¼Í ¼½!1Î Jar Gold Retail Private Limited & Jarfin Retail Private Limited PÀA¥À¤UÀ¼À «gÀÄzÀÞ PÁ£ÀÆ£ÀÄ PÀæªÀÄ ÎÞ1Îο34½ ¼¬¯ ÎÎhu¼Í½ ˜z¾.¯ ':17/12/2025. 20) Jar Gold Retail Private Limited ®+ )¼Í®- .® ÎÞ1Îο34ªÀAvÉ Manager, SEBI, Southern Regional Office gÀªÀgÀÄ »jAiÀÄ C¢üPÁjUÀ½UÉ PÀ¼ÀÄ»¹gÀĪÀ ¥ÀvÀæ £ÀA.SEBI/SRO/P/OW/2025/27057, ':17/10/2025 & F ¼¬¯ .® ÎÞ1Îο34½AÎ ¼ÎP¼Í½ 1)f¾¬ 7® Ý ¯Í ¼Í, UÉßÃAiÀÄ )V¾#,
"Î#¿%¼Í ¼½¼ (¾®¬ ¬.¹.Dgï.JA./663/r¹¦(D«)/2025, ':19/12/2025, 2)f¾¬ Ý
- 16 -
HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026
¯Í ¼½¼ ÎÝ! (¾®¬ ¬.54/®¾¯-4/.¹N¦/2025, ':06/12/2025, 3) ªÀiÁ£Àå ªÀĺÁ ¤zÉÃð±ÀPÀgÀÄ & DgÀPÀëPÀ ªÀĺÁ +!Ýw¼Í, ¾ ¾a ¼½¼ ÎÝ! ®¬. ¬. ®¾¯-12/45/2025, ':11/11/2025.” X '¬ '¾16/01/2026 ¼®Í "ÎR1Îy 10:30 #tÎ1Î T¾' PSI-2 g.ÝjÎÝ1Ì [., Îμ®#¾ Ý j¾kÎ ¼½¼Í +ÝH® ®Î¼¬ÍF ®xÎ®Í ®Î!¬ ;ÝÎ1Î j¾k¾ n.¼. 25/2016 -¾ 21( 1 ) ®¬Í 21 (2) BUDS Act 2019 !ݬ ®.¼¯ Q¾9 ÎÎH¼ÍAÎ .= The complaint leads to seizure of several materials.
All that led the petitioners to this Court. The contention is that it does not amount to a deposit under the Act. Section 21 and 22 of the Act reads as follows: <21. Punishment for contravention of section 3. 4 (1) Any deposit taker who solicits deposits in contravention of section 3 shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to five years and with fine which shall not be less than two lakh rupees but which may extend to ten lakh rupees. (2) Any deposit taker who accepts deposits in contravention of section 3 shall be punishable with imprisonment for a term which shall not be less than two years but which may extend to seven years and with fine which shall not be less than three lakh rupees but which may extend to ten lakh rupees. &
&
&
22. Punishment for contravention of section 4. 4 Any deposit taker who contravenes the provisions of section 4 shall be punishable with imprisonment for a term which may extend to seven years, or with fine which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of the fraudulent default referred to in said section, whichever is higher, or with both.=
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Section 2(4) defines what is a deposit. It reads as follows: <2. Definitions.4
&&.
It reads as follows: <2. Definitions.4
&&. (4) <deposit= means an amount of money received by way of an advance or loan or in any other form, by any deposit taker with a promise to return whether after a specified period or otherwise, either in cash or in kind or in the form of a specified service, with or without any benefit in the form of interest, bonus, profit or in any other form, but does not include4 (a) amounts received as loan from a scheduled bank or a co-operative bank or any other banking company as defined in Section 5 of the Banking Regulation Act, 1949 (10 of 1949); (b) amounts received as loan or financial assistance from the Public Financial Institutions notified by the Central Government in consultation with the Reserve Bank of India or any non-banking financial company as defined in clause (f) of Section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934) and is registered with the Reserve Bank of India or any Regional Financial Institutions or insurance companies; (c) amounts received from the appropriate Government, or any amount received from any other source whose repayment is guaranteed by the appropriate Government, or any amount received from a statutory authority constituted under an Act of Parliament or a State Legislature; (d) amounts received from foreign Governments, foreign or international banks, multilateral financial institutions, foreign Government owned development financial institutions, foreign export credit collaborators, foreign bodies corporate, foreign citizens, foreign authorities or person resident outside India subject to the provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and the rules and regulations made thereunder; (e) amounts received by way of contributions towards the capital by partners of any partnership firm or a limited liability partnership; - 18 - HC-KAR NC: 2026:KHC:18915 WP No. 6769 of 2026 (f) amounts received by an individual by way of loan from his relatives or amounts received by any firm by way of loan from the relatives of any of its partners; (g) amounts received as credit by a buyer from a seller on the sale of any property (whether movable or immovable); (h) amounts received by an asset re-construction company which is registered with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (i) any deposit made under Section 34 or an amount accepted
by a political party under Section 29-B of the Representation of the People Act, 1951 (43 of 1951); (j) any periodic payment made by the members of the self- help groups operating within such ceilings as may be prescribed by the State Government or Union territory Government; (k) any other amount collected for such purpose and within such ceilings as may be prescribed by the State Government; (l) an amount received in the course of, or for the purpose of, business and bearing a genuine connection to such business including4 (i) payment, advance or part payment for the supply or hire of goods or provision of services and is repayable in the event the goods or services are not in fact sold, hired or otherwise provided; (ii) advance received in connection with
consideration of an immovable property under an agreement or arrangement subject to the condition that such advance is adjusted against such immovable property as specified in terms of the agreement or arrangement; (iii) security or dealership deposited for the performance of the contract for supply of goods or provision of services; or
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(iv) an advance under the long-term projects for supply of capital goods except those specified in item (ii): Provided that if the amounts received under items (i) to (iv) become refundable, such amounts shall be deemed to be deposits on the expiry of fifteen days from the date on which they become due for refund: Provided further that where the said amounts become refundable, due to the deposit taker not obtaining necessary permission or approval under the law for the time being in force, wherever required, to deal in the goods or properties or services for which money is taken, such amounts shall be deemed to be deposits. Explanation.4For the purposes of this clause,4 (i) in respect of a company, the expression <deposit= shall have the same meaning as assigned to it under the Companies Act, 2013 (18 of 2013); (ii) in respect of a non-banking financial company registered under the Reserve Bank of India Act, 1934 (2 of 1934), the expression <deposit= shall have the same meaning as assigned to it in clause (bb) of Section 45-I of the said Act; (iii) the expressions <partner= and <firm= shall have the meanings respectively assigned to them under the Indian Partnership Act, 1932 (9 of 1932); (iv) the expression <partner= in respect of a limited liability partnership shall have the same meaning as assigned to it in clause (q) of sub-section (1) of Section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); (v) the expression <relative= shall have the same meaning as assigned to it in the Companies Act, 2013 (18 of 2013);= (Emphasis supplied) The provisions of the Act define <deposit= in expansive terms and the argument that the statute must be construed narrowly, so as to exclude digital or gold backed arrangements stands repelled. - 20 -
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9. The evolution of digital gold, as a commercial concept, is not in dispute.
However, the materials on record disclose that serious allegations are surfaced, including assertions that physical gold could not be traced when demanded, notwithstanding the assurances to the contrary. Searches have allegedly yielded gold bearing the Company9s branding at the premises of the office bearers. The learned senior counsel has strenuously contended that there is an agreement entered into between the Brinks India Private Limited and the petitioners for storage of gold and would contend that all the gold is stored in the vault of Brinks India Private Limited. With all this staring, this Court cannot lend its protective hands to the petitioners and obliterate the crime in its incipient stage. Investigation in such cases is imperative, as the investors have already made hue and cry through communications between them that there is no gold and no money. 10. In the light of circumstances giving rise to sharply contested questions of fact, which cannot be adjudicated in the proceedings of this nature, at this juncture, as it is well settled principle of law that power to quash criminal proceedings in exercise of jurisdiction under Section 528 of the BNSS is an exception and not the rule. The Apex Court has repeatedly cautioned that Courts must refrain from embarking upon appreciation of disputed
facts or evaluating the probative worth of material, at the stage of investigation. It becomes apposite to refer to the judgment of the Apex Court in the case of KAPTAN SINGH v. STATE OF UTTAR PRADESH reported in (2021) 9 SCC 35, wherein the Apex Court has held as follows: <&. &. &. 9.1. At the outset, it is required to be noted that in the present case the High Court in exercise of powers under Section 482 Cr.P.C.,,
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has quashed the criminal proceedings for the offences under Sections 147, 148, 149, 406, 329 and 386 IPC. It is required to be noted that when the High Court in exercise of powers under Section 482 Cr.P.C.,, quashed the criminal proceedings, by the time the investigating officer after recording the statement of the witnesses, statement of the complainant and collecting the evidence from the incident place and after taking statement of the independent witnesses and even statement of the accused persons, has filed the charge-sheet before the learned Magistrate for the offences under Sections 147, 148, 149, 406, 329 and 386 IPC and even the learned Magistrate also took the cognizance. From the impugned judgment and order [Radhey Shyam Gupta v. State of U.P., 2020 SCC OnLine All 914] passed by the High Court, it does not appear that the High Court took into consideration the material collected during the investigation/inquiry and even the statements recorded. If the petition under Section 482 Cr.P.C.,, was at the stage of FIR in that case the allegations in the FIR/complaint only are required to be considered and whether a cognizable offence is disclosed or not is required to be considered. However, thereafter when the statements are recorded, evidence is collected and the charge-sheet is filed after conclusion of the investigation/inquiry the matter stands on different footing and the Court is required to consider the material/evidence collected during the investigation. Even at this stage also, as observed and held by this Court in a catena of decisions, the High Court is not required to go into the merits of the allegations and/or enter into the merits of the case as if the High Court is exercising the appellate jurisdiction and/or conducting the trial.
As held by this Court in Dineshbhai Chandubhai Patel [Dineshbhai Chandubhai Patel v. State of Gujarat, (2018) 3 SCC 104 : (2018) 1 SCC (Cri) 683] in order to examine as to whether factual contents of FIR disclose any cognizable offence or not, the High Court cannot act like the
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investigating agency nor can exercise the powers like an appellate court. It is further observed and held that that question is required to be examined keeping in view, the contents of FIR and prima facie material, if any, requiring no proof. At such stage, the High Court cannot appreciate evidence nor can it draw its own inferences from contents of FIR and material relied on. It is further observed it is more so, when the material relied on is disputed. It is further observed that in such a situation, it becomes the job of the investigating authority at such stage to probe and then of the court to examine questions once the charge- sheet is filed along with such material as to how far and to what extent reliance can be placed on such material. 9.2. In Dhruvaram Murlidhar Sonar [Dhruvaram Murlidhar Sonar v. State of Maharashtra, (2019) 18 SCC 191 : (2020) 3 SCC (Cri) 672] after considering the decisions of this Court in Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] , it is held by this Court that exercise of powers under Section 482 Cr.P.C.,, to quash the proceedings is an exception and not a rule. It is further observed that inherent jurisdiction under Section 482 Cr.P.C.,, though wide is to be exercised sparingly, carefully and with caution, only when such exercise is justified by tests specifically laid down in the section itself.
It is further observed that appreciation of evidence is not permissible at the stage of quashing of proceedings in exercise of powers under Section 482 Cr.P.C., Similar view has been expressed by this Court in Arvind Khanna [CBI v. Arvind Khanna, (2019) 10 SCC 686 : (2020) 1 SCC (Cri) 94] , Managipet [State of Telangana v. Managipet, (2019) 19 SCC 87 : (2020) 3 SCC (Cri) 702] and in XYZ [XYZ v. State of Gujarat, (2019) 10 SCC 337 : (2020) 1 SCC (Cri) 173] , referred to hereinabove. - 23 -
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9.3. Applying the law laid down by this Court in the aforesaid decisions to the facts of the case on hand, we are of the opinion that the High Court has exceeded its jurisdiction in quashing the criminal proceedings in exercise of powers under Section 482 Cr.P.C.,
10. The High Court has failed to appreciate and consider the fact that there are very serious triable issues/allegations which are required to be gone into and considered at the time of trial. The High Court has lost sight of crucial aspects which have emerged during the course of the investigation. The High Court has failed to appreciate and consider the fact that the document i.e. a joint notarised affidavit of Mamta Gupta Accused 2 and Munni Devi under which according to Accused 2 Ms Mamta Gupta, Rs 25 lakhs was paid and the possession was transferred to her itself is seriously disputed. It is required to be noted that in the registered agreement to sell dated 27-10-2010, the sale consideration is stated to be Rs 25 lakhs and with no reference to payment of Rs 25 lakhs to Ms Munni Devi and no reference to handing over the possession. However, in the joint notarised affidavit of the same date i.e. 27-10-2010 sale
consideration is stated to be Rs 35 lakhs out of which Rs 25 lakhs is alleged to have been paid and there is a reference to transfer of possession to Accused 2. Whether Rs 25 lakhs has been paid or not the accused have to establish during the trial, because the accused are relying upon the said document and payment of Rs 25 lakhs as mentioned in the joint notarised affidavit dated 27-10-2010. It is also required to be considered that the first agreement to sell in which Rs 25 lakhs is stated to be sale
consideration and there is reference to the payment of Rs 10 lakhs by cheques. It is a registered document. The aforesaid are all triable issues/allegations which are required to be considered at the time of trial. The High Court has failed to notice and/or consider the material collected during the investigation. - 24 -
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11. Now so far as the finding recorded by the High Court that no case is made out for the offence under Section 406 IPC is concerned, it is to be noted that the High Court itself has noted that the joint notarised affidavit dated 27-10-2010 is seriously disputed, however as per the High Court the same is required to be considered in the civil proceedings. There the High Court has committed an error. Even the High Court has failed to notice that another FIR has been lodged against the accused for the offences under Sections 467, 468, 471 IPC with respect to the said alleged joint notarised affidavit. Even according to the accused the possession was handed over to them. However, when the payment of Rs 25 lakhs as mentioned in the joint notarised affidavit is seriously disputed and even one of the cheques out of 5 cheques each of Rs 2 lakhs was dishonoured and according to the accused they were handed over the possession (which is seriously disputed) it can be said to be entrustment of property. Therefore, at this stage to opine that no case is made out for the offence under Section 406 IPC is premature and the aforesaid aspect is to be considered during trial. It is also required to be noted that the first suit was filed by Munni Devi and thereafter subsequent suit came to be filed by the accused and that too for permanent injunction only. Nothing is on record that any suit for specific performance has been filed. Be that as it may, all the aforesaid aspects are required to be considered at the time of trial only. 12. Therefore, the High Court has grossly erred in quashing the criminal proceedings by entering into the merits of the allegations as if the High Court was exercising the appellate jurisdiction and/or conducting the trial. The High Court has exceeded its jurisdiction in quashing the criminal proceedings in exercise of powers under Section 482 Cr.P.C.,
13.
Even the High Court has erred in observing that original complaint has no locus. The aforesaid observation is made on the premise that the complainant has not placed on record the power of
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attorney along with the counter filed before the High Court. However, when it is specifically stated in the FIR that Munni Devi has executed the power of attorney and thereafter the investigating officer has conducted the investigation and has recorded the statement of the complainant, accused and the independent witnesses, thereafter whether the complainant is having the power of attorney or not is to be considered during trial. 14. In view of the above and for the reasons stated above, the impugned judgment and order [Radhey Shyam Gupta v. State of U.P., 2020 SCC OnLine All 914] passed by the High Court quashing the criminal proceedings in exercise of powers under Section 482 Cr.P.C., is unsustainable and the same deserves to be quashed and set aside and is accordingly quashed and set aside. Now, the trial is to be conducted and proceeded further in accordance with law and on its own merits. It is made clear that the observations made by this Court in the present proceedings are to be treated to be confined to the proceedings under Section 482 Cr.P.C., only and the trial court to decide the case in accordance with law and on its own merits and on the basis of the evidence to be laid and without being influenced by any of the observations made by us hereinabove. The present appeal is accordingly allowed.= (Emphasis supplied) The Apex Court in KAPTAN SINGH has clearly held that interference at the juncture of the investigation, except in exceptional circumstances, would amount to stifling of legitimate enquiry and would run afoul of binding precedents. 11.
The submission that the Act stands uninvoked in the present circumstances is entirely bereft of merit and cannot be countenanced. The absence of express regulatory supervision by bodies such as SEBI or the RBI over the purchase or storage of gold, be it in tangible form or in its digital avatar, does not confer upon such
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transactions a sanctuary beyond the reach of the statute. The argument that deposit is not in currency or hard cash but in gold, physical or digital, is equally unavailing. <Law is concerned not with the cosmetic garb in which a transaction is clothed, but with its intrinsic character and its economic substance. In the rapidly mutating landscape of cyber enabled financial frauds, deception no longer adheres to the crude paradigm of cash deposits.= It now assumes a subtler and more sophisticated forms 3 commodities, digital assets, gold linked assurances and other alluring constructs designed to circumvent regulatory vigilance. 12. The BUDS Act, being a remedial and protective legislation, was enacted precisely to arrest such ingenuity in evasion. To confine the expression money within the narrow confines of physical currency, would become a pedantic and myopic construction, which would render the statute otiose in the face of evolving financial stratagems and defeat the very mischief it was designed to suppress. Therefore, a purposive, expansive and pragmatic interpretation alone would advance the object of the enactment and uphold the protective mantle to extend over unsuspecting deposits. Even otherwise, what is now challenged is an FIR. The reason for challenge is the crime not fitting itself in the definition of the word deposit. It is trite law that FIR is not an encyclopedia of offences, it is only to trigger investigation. Different offences may come in while filing the final report. It becomes apposite to quote a paragraph of the judgment of the Apex Court in the case of NEEHARIKA INFRASTRUCTURE (P) LTD. v. STATE OF MAHARASHTRA reported in (2021) 19 SCC 401, wherein the Apex Court has held as follows: <&. &. &. 33.12.
The first information report is not an encyclopaedia which must disclose all
facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should
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not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. After investigation, if the investigating officer finds that there is no substance in the application made by the complainant, the investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure.= (Emphasis supplied) In the light of the afore-narrated facts, glaring enough they are, the allegations disclose serious and triable issues, which demand thorough investigation.
13. Therefore, finding no merit in the petition, the petition stands rejected.=
In the light of the issue being already answered, the present petition will have to meet the same fate of dismissal, like the petition filed by accused Nos.3 and 4.
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4. For the reasons rendered in Writ Petition No.5968 of 2026, the subject petition also stands rejected.
Sd/- (M.NAGAPRASANNA) JUDGE
bkp List No.: 2 Sl No.: 50